Deirdre Grusovin, a member of the
New South Wales Legislative Assembly, speaking under
parliamentary privilege in 1994, accused Marsden of having sex with minors. In 1995 and 1996, the Seven Network's shows
Today Tonight and
Witness also aired allegations of having sex with minors against Marsden. In response, Marsden described himself as a "promiscuous homosexual" but denied allegations of
paedophilia. Channel Seven produced witnesses who claimed to have sex with Marsden while underage, but many were discredited by errors on points of fact, such as the type of house Marsden lived in and, in one case, whether he was
circumcised. In 2001, after 214 days of hearings, Justice David Levine ruled that Seven had failed to prove its allegations of
child sexual abuse. Marsden was awarded A$525,000 in
damages and legal costs; Marsden's legal costs were estimated at around A$6 million; Seven's own costs at that stage were estimated at A$10–12 million. Although Levine ruled in Marsden's favour on the allegations of child sexual abuse, his findings were deeply critical of Marsden in other regards. He found that Marsden had lied about several issues in the trial, notably his role in drafting a
statutory declaration by one of the witnesses. He also found that on the
balance of probabilities, Marsden had used convicted rapist and murderer
Les Murphy to persuade a witness to change his position, and had probably persuaded two other witnesses to influence another. According to then
Sydney Star Observer editor Marcus O'Donnell, Marsden asked the
Observer to publish the names of one of the prosecution witnesses, when there was a suppression order given on the grounds that the witness's life would be in danger if the name were published. Legal commentator
Richard Ackland described the case as "probably the biggest piece of civil litigation NSW has seen for many years... without doubt the largest, longest and most comprehensive defamation case in the history of Australia. And probably one of the biggest in the history of the
common law world." In 2002, the
New South Wales Court of Appeal ruled that the compensation payout should have included consideration for hurt feelings, and ordered a new trial on damages. Marsden and Seven subsequently came to a confidential out-of-court settlement, estimated by various parties as somewhere between A$6 million and A$9 million. and questions of truthfulness during the trial, Marsden emerged victorious over Channel Seven. Marsden denied abusing minors, and a number of such accusers were labelled unreliable witnesses. One of the witnesses, who had previously made a claim for compensation that had been rejected, made a second claim (which took place during the period of the defamation trial itself). This action overturned the previous decision. "Judge Coorey overturned a decision of Magistrate Jacqueline Milledge, sitting as the Victims Compensation Tribunal and was satisfied on the balance of probabilities that compensable acts of violence by five men, including John Marsden had taken place against "X"...." Other accusers documented their own alleged abuse in other proceedings. Marsden was not subsequently charged on the basis of the compensation judgement. ==Illness and death==